Closure of dealership worries and surprises

BY JENNIFER PALMER Comments 1
Published: October 10, 2008

Mike Denney Chevrolet has closed its doors and eliminated its stock of cars and trucks.

More Info

ACROSS THE NATION

Dealers on edge

NEW YORK — Hundreds of thousands of new cars and trucks that would have quickly made their way to people’s driveways a year ago are now stacking up on dealer lots across the country, with potential buyers worried about whether they’ll keep their jobs, be able to pay for gasoline, or qualify for a car loan.

For auto dealers already suffering under the worst U.S. sales downturn in 15 years, the increasing cost of the credit they use to keep inventory in their showrooms means every Ford Focus and Jeep Grand Cherokee with a sale sticker in the window is chipping away at dealers’ razor-thin profit margins every day and threatening to send more of them out of business.

Paul Taylor, chief economist with the National Automobile Dealers Association, said that dealership closures spiked in September, promting him to raise his forecast of closures. He now expects 500 to 600 of the group’s 20,770 dealerships to shut their doors this year, up from previous estimates of 300 to 400.

About 430 dealerships closed last year and 295 closed up shop in 2006, according to the NADA.

The Associated Press

NewsOK Related Articles

Crisis far worse than thought, analyst says
10/10/2008 Economist Mark Dotzour’s assessment of the financial meltdown mirrored the stock market the past seven days: slam, slam, slam — one downer after...
Citigroup drops claim over Wachovia buyout
10/10/2008 NEW YORK — Citigroup backed out of negotiations with federal regulators and Wells Fargo in its battle for Wachovia Corp., but vowed to have its day in...
Bush says anxiety feeding market instability
10/10/2008 SAN FRANCISCO — Could it be just a year ago that jubilant investors were celebrating record highs in the stock market? It almost seems inconceivable...
Leaders promise healthy economy
10/10/2008 Gov. Brad Henry assured Oklahomans on Thursday that the state’s economy remains strong while Wall Street continues to tumble. "Our banks are...
Glum mood pervades Wall Street after fall
10/10/2008 NEW YORK — The extravagance of Wall Street is proudly on display at Bobby Van’s Steakhouse in lower Manhattan: The restaurant features J.P....
Tax experts suggest means to close $300 billion gap
10/10/2008 WASHINGTON — Getting people to pay the taxes they owe could be one significant way of coping with federal deficit increases and the potential $700...
SEC opens markets to short selling again
10/10/2008 NEW YORK — The government is letting investors bet on financial stocks going down in hopes that the market benefits. It’s a strategy known on...
Economic toolbox almost empty
10/10/2008 WASHINGTON — What’s left in Uncle Sam’s economic toolbox? The commitment of $700 billion didn’t impress markets here and around the...
Three convicted of running $33M investment scheme
10/10/2008 ROCHESTER, N.Y. — Three people have been found guilty of running a Ponzi scheme that bilked more than two dozen investors in the United States —...

Word of the closure spread last week, and by this week, the lot had been emptied. "They’ve been good in our community,” said Kathy Montgomery at the Guthrie Chamber of Commerce. "We’re just surprised.”

When contacted at the dealership Sept. 29, Denney declined to comment. He could not be reached by telephone this week.

Second dealer holds closing sale

GMAC provided financing for the dealership. A GMAC spokesman, Mike Stoller said the company doesn’t discuss actions involving individual dealers.

In general, he said, "we regularly review credit risk related to wholesale financing, and we take appropriate action to minimize that risk.”

A spokeswoman for Chevrolet also would not discuss the actions of an individual dealer. She advised customers wanting a repair under warranty to find another Chevy dealer by calling (800) 222-1020 or by going to www.chevrolet.com.

A second Chevrolet dealership, Purcell Chevrolet, has been sold and has been holding a closing sale, according to advertisements in The Oklahoman.